11 Jul 2013
Weidmann: ECB did not change strategy by providing forward guidance
FXstreet.com (Barcelona) - Speaking at a banking event in Munich ECB Governing Council member and Bundesbank head Jens Weidmann suggested that the forward guidance on interest rates, introduced by Mario Draghi last week, did not denote a shift in the central bank's monetary policy strategy.
“It is the attempt to make our monetary policy orientation even simpler to explain, so that it is understood by as many market participants as possible,” he stated.
He also assured that the low level for interest rates is currently justified, adding however that keeping them thus for an extended period of time could carry risks to financial stability and result in a slowdown in reforms and structural changes. That is why the ECB would rise rates if conditions warranted it, regardless of the forward guidance indications, Weidmann signalized.
Furthermore, the Buba chief added that the central bank's monetary policy “has ventured into dangerous territory” and that it could not resolve the EU crisis on its own.
“It is the attempt to make our monetary policy orientation even simpler to explain, so that it is understood by as many market participants as possible,” he stated.
He also assured that the low level for interest rates is currently justified, adding however that keeping them thus for an extended period of time could carry risks to financial stability and result in a slowdown in reforms and structural changes. That is why the ECB would rise rates if conditions warranted it, regardless of the forward guidance indications, Weidmann signalized.
Furthermore, the Buba chief added that the central bank's monetary policy “has ventured into dangerous territory” and that it could not resolve the EU crisis on its own.